Ladbrokes a Success Story in 2006, Employees Rewarded

Two weeks after announcing a 5 percent increase in profits for the first four months of the year, British bookmaker Ladbrokes has revealed that it will reward its employees by giving free shares in the company to those with more than one year of experience.

The new year began with Ladbrokes Plc, then known as Hilton Group Plc, in the process of selling its hotels unit to an American sister company. There was great speculation about the future of the company at the time, with many observers predicting that Ladbrokes, now a gambling-only firm, would either be acquired or merged with another company. It was no secret that private equity bidders, including BC Partners, Blackstone and CVC Capital Partners, had been attempting to woo Ladbrokes for a sale price of about £4 billion (US$7 billion).

Despite the heavy courtship of Ladbrokes, CEO Chris Bell warded the suitors off at every opportunity.

"You'll need a very big war chest before we show any interest," Bell said in January. "This will be a company worth over £4 billion, and my job is to make it even stronger, so if anybody wants to own us, they would have to put up a very big pot of gold."

Five months later, the company's growth can be seen not only tangibly on its profit statement, but also in the new international agreements it has entered. Within the last week, two new deals for the international expansion of Ladbrokes have been announced.

Under the terms of one of the agreements, Ladbrokes will team up with Cyberview Technology, Inc, a provider of downloadable server-based systems to the land-based gaming industry, to jointly supply a complete sports betting package to casinos and other licensed gambling venues internationally. The system will offer options for both large and small licensed premises to show live sporting events on screen together with betting odds on the outcome of events and betting in play throughout each event, and sporting content will be tailored to local markets. Ladbrokes will provide odds and liability management, and the turnkey solution will equip casinos with tailored odds-display screens and bet-capture systems. Cyberview will market the new service and manage installation, integration, systems training, cash management and technology support.

Cyberview says it is already in discussions with several Moscow casinos to provide the service, and it hopes to launch the product in other markets next year.

In an unrelated venture, representatives of Ladbrokes were in Hanoi on Wednesday to give a presentation to Vietnamese sports authorities on cooperation and technical matters related to the organization of legal sports betting. Vietnamese football has been hit by an illegal betting scandal in recent months, and officials are apparently eager to learn of potential solutions, even though a proper legal regulatory framework for sports betting is not yet in place.

An article in Vietnamese newspaper Tuoi Tre indicates that Vietnamese officials were quite impressed with Ladbrokes presentation.

If Ladbrokes lands a deal either consulting or offering services to the Vietnamese market, it would not be its first such venture outside of Europe. At the end of February, the company secured a deal to consult China Sports Lottery on its operation of new football lottery shops in China, just in time for the FIFA World Cup. Upon the signing of the deal, Bell hinted, "This demonstrates how well the brand travels. We're likely to announce another two or four (agreements) in the coming months, and they'll all be in Asia or Europe."

And while it pursues expansion abroad, Ladbrokes continues to be attentive to the British and European markets. A recent agreement with Ukash will enable British, Spanish and Irish Ladbrokes Internet customers to fund their accounts via Ukash vouchers.

Ladbrokes and Ukash estimate that about 30 percent of British adults are reluctant to use credit cards over the Internet due to security concerns, while 16 percent do not own a credit card and 2.8 million do not have a bank account.

A Ladbrokes spokesperson told eGaming Review "We believe the market opportunity for online cash customers has yet to be fully recognized, and Ladbrokes are keen to be at the forefront of offering new online payment options for their current customers, and opening up the potential for new relationships."

It is against this backdrop of success--only five months removed from a period when the easy bet was that Ladbrokes wouldn't survive as a pure gambling business--that the company is awarding its employees with shares.

Employees who work more than 30 hours per week will receive shares worth £250; those working 20 to 30 hours will receive shares worth £200; and those working under 20 hours will receive shares worth £150.